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Tata Consultancy Services: A Crown Jewel in Turmoil, Valuations Reset Amidst Disruption and Weak Demand
ByAinvest
Sunday, Aug 17, 2025 2:48 am ET1min read
Tata Consultancy Services (TCS) has lost nearly ₹5.66 lakh crore in market value, tumbling 34% from its peak, making 2025 its worst year since the 2008 global financial crisis. The stock is down 26% in 2025, slashing its market capitalization to ₹10.93 lakh crore from a peak of ₹16.59 lakh crore. The rout comes amid weak demand outlook, the disruptive impact of generative AI, and a mixed Q1 scorecard, triggering a foreign investor exodus. Mutual funds, however, have raised their TCS stake from 4.25% to 5.13% in one year and July data showed ₹400 crore of fresh MF buying. Valuations have been reset sharply, with TCS's trailing PE halving from 41x to 20x. Some funds see opportunity in the rubble, calling IT, banks, and other large caps a defensive bucket to ride out volatility.
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